A Guide to Buying Your Parents’ Home

There is currently a growing trend of grown children buying their parents’ home. This can work out well if your parents are looking to downsize their home either locally or in another state, or if you all agree that they should continue living in the home with you. If you love the home in which you grew up and are considering purchasing it from your parents, Cliffco Mortgage Bankers has several things for you to consider.

The Agreement

It’s a wise idea for you and your parents to consult with a lawyer and/or an accountant before you begin the process of purchasing your parents’ home. There may be tax ramifications for both parties involved in this transaction as well as inheritance issues if you have siblings. Be sure that any agreement arrived at between the parties is put in writing.

The Purchase Price

Assuming your parents will be selling you their home without the help of a real estate broker, it will be up to you and them to determine an appropriate price. To arrive at this number, you should review the sales prices of comparable homes in the area that were sold in the last six months.

The Down Payment

A down payment is typically the biggest obstacle to overcome before buying your first home. After all, it’s not easy to save such a large amount. But this obstacle can become much smaller if you are buying your parents’ home and they are willing to provide a gift of equity. This would give you the ability to buy their home with little to no cash down by using the equity in the home as the down payment.

The Mortgage & Closing Costs

You may be disappointed to learn that obtaining a mortgage to purchase your parents’ home is no easier than getting one to purchase a stranger’s home. Lenders have the same exact criteria for mortgage qualification regardless of whose home you are purchasing. Closing costs will likely be very similar to those involved with purchasing anyone else’s home as well.

If you’re considering buying your parents’ home, help is just a phone call away. The home loan experts at Cliffco Mortgage Bankers can provide you with the assistance you need to obtain a mortgage. Call us today at (516) 408-7300.

Cliffco, Inc. is a licensed mortgage lender, also doing business as (DBA) Cliffco Mortgage Bankers and Cliffco, Inc., with corporate headquarters located at 1065 Old Country Road, Suite 204 Westbury, New York 11590. The following states require disclosure of licensing information (If your state is not listed, it does not require a specific license disclosure or we are not currently licensed in that state). Cliffco, Inc. carries current company licensing and is in good standing in the following states: New Jersey – Licensed Mortgage Banker – Correspondent Residential Mortgage Lender License – New Jersey Department of Banking and Insurance; New York – Licensed Mortgage Banker, New York State Department of Financial Services, License # B500651; Pennsylvania – Licensed Mortgage Lender, Pennsylvania Department of Banking and Securities, License #45275; United States Virgin Islands (USVI) – Licensed Mortgage Lender, Office of the Lieutenant Governor, Division of Banking & Insurance, License# VI-MLC-65328. Cliffco, Inc.’s company policies are designed to insure compliance with all federal and state regulations in the solicitation, origination and processing of loans and the protection of privacy for all prospective borrowers and existing customers. Restrictions may apply. Equal Housing Lender, Cliffco, Inc., Nationwide Mortgage Licensing System (NMLS) ID Number 65328.